Walt Disney World is about to embark on a sweeping facelift for the Fantasyland section of the Magic Kingdom, in what the resort calls the biggest overhaul in the theme park's 38-year history.

Plans revealed Saturday call for adding a lavish ride based on The Little Mermaid, expanding a popular Dumbo children's attraction, new interactive areas featuring some of Disney's best-known princesses, and more.

In addition, Disney said it plans to update Star Tours, the Star Wars-themed simulator ride in Disney's Hollywood Studios, with new 3-D effects.

The refurbished Star Tours will debut in 2011. The Fantasyland overhaul will be complete by 2013. Disney declined to say how much it will spend on the projects.

The twin announcements are a Disney World response to the Wizarding World of Harry Potter, the hugely anticipated project being built by rival Universal Orlando in its Islands of Adventure theme park. Industry experts expect Wizarding World, a collection of attractions, shops and restaurants based on the novels by British author J.K. Rowling, to prove a huge draw when it opens in 2010; one that threatens to siphon attendance away from Disney.

But perhaps more importantly, said Robert Niles, publisher of themeparkinsider.com, Disney's Fantasyland expansion could team with Universal's Wizarding World in helping reignite overall travel to Orlando, which has slumped badly amid the global recession.

"There might be some Harry Potter fans who are waffling on the expense of trips to Orlando. But if you can throw in something new at Disney, maybe they'll make the trip," Niles said. "At this point, travel isn't a zero sum game. They've got to get people on planes traveling again."

To drive the expansion, Disney is turning to one of its most enduring and lucrative franchises: princesses. The vast majority of the Fantasyland overhaul will focus on Cinderella, Sleeping Beauty and others in the company's stable of animated heroines.

The biggest-ticket addition will be the Little Mermaid attraction, an enclosed ride that will carry guests through Ariel's underwater realm. It will use an Omnimover ride system similar to that of the Haunted Mansion, and will move through scenes featuring characters and songs from the 1989 movie.

The ride, which has a working title of Under the Sea: Journey of The Little Mermaid, will be the same as one being built as part of the $1 billion overhaul of Disney's California Adventure theme park in Anaheim, Calif., though the twin attractions will have different exteriors.

But what's more, Disney World will construct individual areas -- be it a castle, cottage or chateau -- where guests can interact with some of the company's best-known princesses and other characters from their movies. Children will be able to dance with Cinderella, celebrate Aurora's birthday with the Good Fairies, or play a role with Belle in a performance in the library of the Beast's castle.

The Beast's castle, taken from the 1991 film Beauty and the Beast, will also include a three-room themed restaurant.

"Princesses are certainly one of Disney's strengths. Obviously, there's some limited appeal in terms of gender and age," Niles, of themeparkinsider.com, said. "But anyone who's had a young daughter knows they can be extremely persuasive."

Chris Beatty, a senior concept designer with Walt Disney Imagineering, said a goal is to make the company's iconic princesses appealing to a wider demographic. For example, some villains from the princesses' movies will also be incorporated to help the area appeal to boys.

"We're tailoring our experiences to kind of have that broad appeal," Beatty said. "There're just some great, classic stories, and we know for any guests that travel to the Magic Kingdom, that's always one of the highlights."

Beyond princesses, the plans call for doubling the size of and relocating Dumbo the Flying Elephant to a new "circus grounds" that will include an interactive queue under a big-top tent to entertain children waiting in line. Disney will add a new Pixie Hollow character-greeting area, home to Tinker Bell and other fairies.

To accommodate the expansion, Disney will raze most of Mickey's Toontown Fair, the smallest of the Magic Kingdom's "lands." Gone will be both of the walk-through country houses where guests were guaranteed to meet Disney's most famous characters: Mickey and Minnie Mouse.

Disney says Mickey and Minnie will get new homes near the front entrance of the park. The children's roller coaster, the Barnstormer at Goofy's Wiseacre Farm, will remain, though it will be re-themed, likely with a circus overlay linking it to Dumbo.

The first phase of the Fantasyland expansion, including the Mermaid ride and the princess areas, is scheduled to open in 2012. Pixie Hollow will follow in 2013.

For Star Tours, which debuted in Hollywood Studios in 1989, Disney plans to add new video and dialogue sequences recorded by George Lucas' Lucasfilm studio. The updated 3-D effects will incorporate characters from the three Star Wars prequel films released between 1999 and 2005.

An identical Star Tours at Disneyland will also be upgraded.

Online Disney fan forums have been abuzz about a potential Fantasyland expansion for much of the summer, after blueprints were mysteriously leaked. Disney refused to comment on the plans for weeks, instead waiting to make the announcement at a fan convention this weekend in Anaheim.

Jason Garcia can be reached at jrgarcia@orlandosentinel.com or 407-420-5414.